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Feb 17, 2021
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Error in transferring funds cost Citibank $ 500 million


A US District Court did not allow Citibank to recover the $ 500 million paid to investors in error. An unprecedented solution based on the specifics of New York City laws.

The world’s largest financial institution, Citibank, went to court to recover $ 900 million, which was distributed among investors and creditors of the cosmetic company Revlon due to an error. The bank acted as the organization’s loan agent – due to his oversight, the owners of the assets earned 100 times more than expected. Despite a long legal battle, Citibank will not be able to return most of the transferred money.

The corresponding decision was made by Judge Jesse Furman. Half a billion dollars will remain in Revlon investor accounts in accordance with the specifics of New York State law. The region’s regulations state that recipients of money are exempt from liability. Formally, they were already entitled to the corresponding amounts, and Citibank transactions are recognized as repayment of loans ahead of schedule.

The financial institution’s lawyers intend to appeal the verdict, but their chances of returning the funds are slim. For the first time in history, a bank with a complex system makes such a mistake bordering on irrationality. Netizens sneer at bankers who have made a fatal mistake due to their own inattention.

Citibank and several other major lenders have previously been at the center of a scandal over their refusal to lend to oil companies. Such a decision can be regarded as a violation of antitrust laws.

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Economy
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